OPINION: Give Ukraine Enough Money to Defeat Russia

Ukraine can win the war against Russia. It has all the troops it needs – about one million men and women under arms. It does not need to mobilize more soldiers. The late Columbia University Professor Charles Tilly coined the expression “wars form nations,” and this war has cemented the Ukrainian nation. Ukrainian soldiers do not fight out of fear or for the hope of great remuneration as with Russian soldiers, but for Ukraine.

Ukraine only needs two more things to defeat Russia: money and arms.

Western support for Ukraine has been substantial, though insufficient. The apparent but unspoken Western idea has been to allow Ukraine to survive, but not to win. This is as immoral as mistaken. Russian President Vladimir Putin does not need Ukrainian territory. He needs permanent war to stay in power. If he suborns Ukraine, he will have to proceed with other wars. Therefore, Ukraine’s victory is crucial for the security of Europe. For Putin, a bad war is better than a good peace, because he needs war to justify his domestic repression. Russia’s main problem is Putin, just as Bashar Al-Assad was Syria’s fundamental problem.

The Western aims should be threefold: first, Ukraine’s victory; second, Russia’s defeat; third, regime change in Russia with Putin losing power. Pathetically, most Western leaders are unable to even think about the last two aims.

The German Kiel Institute for the World Economy has recorded a helpful “Ukraine Support Tracker.” From Feb. 24, 2022, until the end of October 2024, it registered actual European disbursements for both military and budget support of €125 billion and American of €88 billion. The Europeans had committed €116 billion more, and the US €31 billion. Europe is gradually rising to its financial task, but it should speed up.

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For 2025, Putin intends to raise Russia’s military and security costs to $176 billion, that is, 41 percent of the federal budget expenditure or 9 percent of Russia’s GDP of $1.9 trillion. The real military costs are likely to be even higher, since Russia does not acknowledge all military expenditure as such and large budget expenditure is now classified, but much of this is stolen and inefficient.

In each of 2023 and 2024, Ukraine spent roughly $90 billion on its military, $40 billion from its own budget and $50 billion in Western arms supplies. Ukraine’s military expenditure is far more efficient and non-corrupt than Russia’s, but Ukraine needs about $100 billion more in financing in 2025 to have a larger military budget than Russia and win the war.

In the current global economy, this is a paltry amount of money. Ukraine’s Western allies have a joint GDP of over $50 trillion, so $100 billion is less than 0.2 percent of their GDP. It would be sheer folly for the West NOT to deliver such funds to Ukraine. It can be done in so many ways. In the Western world, money is plentiful, and the only question should be where to take it.

Financing Ukraine’s victory

The sum needed by Ukraine would be only one-quarter of Elon Musk’s current fortune of $400 billion. A reasonable windfall tax on Musk would suffice to see Ukraine win the war.

Norway has a Pension Fund or sovereign wealth fund of $1.7 trillion. The Norwegians have benefited immensely from higher oil and gas prices because of the war in Ukraine. Norway, which is strongly pro-Ukrainian, could send its huge war profits to arm Ukraine.

Qatar has become a great power in the Middle East by deploying its Qatar Investment Authority, although it has merely $500 billion.

Yet, the obvious answer is the $300 billion of Russian Central Bank reserves in the West that the West has frozen. About $200 billion is frozen in the Euroclear bank in Brussels. There is no reason not to seize those funds and pass them on to Ukraine as Russian war reparations. Half of it in 2025 suffices to turn the war to Ukraine’s victory.

Happily, last June the G7 agreed to issue loans of $50 billion to Ukraine on the bases of the future returns on these frozen funds. This week, the US administration laudably did its part, passing on $20 billion to Ukraine through a World Bank trust fund. The EU, Japan, the UK and Canada are supposed to deliver the rest - $30 billion – before the end of this year. This is excellent, but not enough.

This is the time to seize the whole amount. Ukraine must win the war, while as few Ukrainians as possible should be killed.

With an additional $100 billion, Ukraine can buy all the arms it needs to win. The US has plenty of arms – half of its arsenal has been written off and stands perfectly usable in the deserts of Arizona and Nevada. Just deliver it! US arms producers love exporting, and the Pentagon should facilitate its licensing.

Ukraine has recovered as a major arms producer. Last September, I talked to Oleksandr Kamyshin, who is overseeing Ukraine's armaments industry. He claimed that Ukraine in 2024 has produced and sold arms, mainly in the form of two million drones, for $10 billion, but it has the capacity to produce more, to the tune of $20 billion. In 2025, that capacity will be $30 billion – that’s four million drones of various types, but Ukraine needs funds.

The West had better get serious and declare 2025 the year of Ukraine’s victory over Russia. It only needs to take a few strategic steps.  Russian funds must be seized, and they should be used to buy arms from Ukraine.

Europe and the US must make sure that Ukraine has $200 billion in military expenditure in 2025. Then its victory will be assured.

The views expressed are the author’s and not necessarily of Kyiv Post.